German Rent Prices Surge as Housing Demand Outpaces Supply

A new study reveals steep increases in rental costs across major cities, driven by housing shortages and declining construction rates.

Rental prices in Germany rose by an average of 4.7% in 2024, with Berlin seeing the largest increase at 8.5%, followed by Essen (8.2%) and Frankfurt (8%).
The housing supply remains critically low, with only 260,000 new units completed in 2024 and projections for 2025 dropping further to 230,000 units.
Demand for rental housing is intensifying due to insufficient construction, ongoing migration, and financial barriers preventing potential homeowners from buying properties.
While rental prices climb, property purchase prices have remained relatively stable, with slight declines or modest increases depending on the property type.
Experts warn that without significant policy changes to boost construction and address structural issues, rental affordability will continue to worsen.